Abstract
The global financial crisis has highlighted the importance of integrating financial stability concerns into monetary policy. In the Bank of Canada’s view, monetary policy should be the last line of defence against threats to financial stability, behind the joint responsibility of borrowers and lenders, appropriate regulatory oversight, and sound macroprudential policies. Still, it is critical to understand the interlinkages between monetary policy and financial stability, given that the objectives are not always consistent. This implies the necessity of trade-offs. At the Bank of Canada, this is regarded as a problem of risk management rather than policy optimization. That is why the Bank operates a risk-management approach to monetary policy—keeping inflation control as its primary mission.
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Acknowledgements
I would like to thank Don Coletti and Stephen Murchison for their help in preparing this speech.
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These remarks were presented at the Annual Meeting of the National Association for Business Economics on October 12, 2015.
*Stephen S. Poloz was appointed Governor of the Bank of Canada, effective June 3, 2013, for a term of seven years. As Governor, he is also Chairman of the Board of Directors of the Bank. He first joined the Bank of Canada in 1981, culminating in his appointment as Chief of the Bank’s Research Department in 1992. After his departure from the Bank in 1995, he spent four years at BCA Research. Governor Poloz joined Export Development Canada (EDC) in 1999 as Vice-President and Chief Economist and in 2004 was promoted to Senior Vice-President, Corporate Affairs and Chief Economist. From 2008 to 2010, he was Senior Vice-President, Financing. In January 2011, he was appointed President and Chief Executive Officer of EDC, a position in which he served until his appointment as Governor of the Bank of Canada. He has been a visiting scholar at the International Monetary Fund and at Japan’s Economic Planning Agency. He has taught economics at the Western University, Concordia University and Queen’s School of Business. He is a past president of the Ottawa Economics Association. Governor Poloz is a Certified International Trade Professional and a graduate of Columbia University’s Senior Executive Program. He graduated from Queen’s University in 1978 with a bachelor's degree in economics. He received a master’s degree in economics in 1979 and a Ph.D. in economics in 1982, both from Western University.
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Poloz, S. Integrating Financial Stability into Monetary Policy. Bus Econ 50, 200–205 (2015). https://doi.org/10.1057/be.2015.35
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DOI: https://doi.org/10.1057/be.2015.35